The LME three-month aluminium price hit a low of $1,613 per tonne during morning trading on Wednesday, which is the lowest since early October 2016. The benchmark price has not traded above $2,000 per tonne since October 2018.

Low aluminium prices could be causing problems for smelters with margins tightening. Fastmarkets’ alumina index, fob Australia was calculated at $297.23 per tonne on Wednesday - around 18% of the LME three-month aluminium price.

Chinese data service Antaike previously indicated that the virus would incite a sharp short-term decline in downstream stainless steel demand for nickel in the first quarter of 2020 - mills could operate on stockpiled material brought before the Lunar New Year and would be unlikely to resupply due to virus-related logistical issues in moving end products.

The anticipated electric vehicle (EV) boom in battery demand for nickel has also been subject to slowed growth this year - the latest figures from the China Association of Automobile Manufacturers (CAAM) show sales of new energy vehicles (NEVs) - including EVs - dropped by 75.2% year on year in February. Output of such vehicles in China fell by 82.9% over the same comparison.

Nickel stocks at LME-listed warehouses have almost doubled so far this year, rising to 231,480 tonnes on March 18 from 156,378 tonnes on January 2.

Zinc

The three-month zinc price on the LME is at its lowest since April 2016.

Production of zinc has been relatively less disrupted by virus-led isolation and transport lockdown policies than other base metals, with major operations like Antamina carrying on production as usual.

Despite the month-long transport restrictions in China earlier this year, Chinese domestic zinc output still rose by 13% year on year to 1.04 million tonnes over the first two months of 2020.

Lead was the lone three-month LME base metal to not fall as at 3.09pm London time on Wednesday, with the heavy metal at $1,635 per tonne, up by $9 per tonne from the previous day’s close.

Fastmarkets analyst James Moore said that the long tail visible on LME lead’s daily candlestick on Wednesday suggests that strong dip-buying interest has featured below $1,600 per tonne.

LME lead stocks totaled 71,125 tonnes on Tuesday, as two-way stock flows continue, despite the fact the LME lead’s cash/three-month spread has returned to a comfortable contango - at $16 per tonne on Wednesday.

Tin

The LME three-month tin price hit an almost 11-year low of $13,200 per tonne during intraday trading on Wednesday.

Tin’s dramatic short-term price decrease has been widely attributed to a persistent bearish speculative fund positioning for the metal, which looks to have been left out of the short-covering rallies and dip-buying seen in the other LME base metals.

Bearishness toward tin has been exacerbated by news that South Korea and Japan, dominant regions in the semi-conductor sector, are largely out of the market due to the rapid spread of the coronavirus in both countries.

LME tin socks have declined by 14% from the 7,595-tonne year to date high on February 26 to total 6,530 tonnes on Wednesday.

[Editor’s note: This article was updated at 10am London time on March 19 to amend the figure given for the year-on-year decline in China's new energy vehicle sales in February.]

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